September 19, 2003
China's Fresh Interest In US Soybeans
China, the world's top soybean importer, bought several cargoes of U.S. soybeans this week, U.S. grain traders said on Thursday, confirming that fresh Chinese import permits were responsible for the sudden upsurge in demand.
Talk of the purchases over Wednesday and Thursday fuelled a second straight day of gains in CBOT soybean futures, with the November contract adding 9-3/4 cents to its Wednesday's gain of 6-1/2 cents to end at $6.27 on Thursday. There was no confirmation of the sales from the U.S. Agriculture Department, whose offices in Washington were closed as Hurricane Isabel crashes into the U.S. capital later in the day.
Trader estimates of the purchases went as high as 10 Panamax-size cargoes of up to 60,000 tonnes each, with most of them saying shipment was slated for December and January.
A few traders said some of the soybeans were slated for shipment as early as November. China now accounts for one-third of all soybeans exported from the United States. Demand or lack of it from that nation usually has a more telling effect on Chicago Board of Trade futures than any other on the long list of U.S. customers.
Chinese demand for U.S. soybeans had waned in recent weeks, which traders attributed to restrictions on imports placed by Beijing to keep domestic prices stable as its farmers harvest their own crop. China has denied such claims.
"They definitely bought some," one exporter said. "I would say they bought five (cargoes) for Dec/Jan shipment. He said problems faced by Chinese importers in securing import permits had weakened their demand for U.S. soybeans for shipment in October and November.
"We knew they were going to skip October and November because they have been having CIQ problems," he said, referring to import permits issued by China's Quarantine Bureau. Another exporter said there were rumours earlier in the week that at least three cargoes of U.S. soybeans likely sold to European companies were switched to Brazil, where a spate of farmer selling has tumbled basis prices.
He said some of the soybeans bought by Chinese importers this week could either be South American supplies, or optional U.S. or South American origin.
